As the Otago Rugby Football Union continues to struggle to
balance its books, rugby writer Steve Hepburn looks at how it
got there and finds it is not alone.
As soon as it went professional in 1996, rugby was said to be
a business.
Actually, it was a business long before then, but the new era
ushered in players being paid above the table.
And what is the first rule of business?
Costs must be matched by revenue. What you pay out you must
get back in.
But in the past 15 years, that is what the Otago Rugby
Football Union – like most rugby unions in this country – has
not managed to do.
In the past five years, the Otago union has racked up losses
totalling just under $4 million. Much of that consists of
paper losses, but they still sit on the account books.
When it possessed a valuable asset in Carisbrook, the losses
were not a worry. The ORFU simply had the ground to borrow
against.
And why not?
Own a flash house and you can borrow against it to buy a new
car.
The problem is the Otago union bought too many cars, and the
house plummeted in value.
In 2004, Carisbrook, with its stands, land, hospitality
suites and other items, was valued at more than $20 million
on paper.
In that year – which was when the
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